Managing Institutional Evolution to Increase the Likelihood of Success: Examples of Guidance from Chinese History

Abstract

Institutions are effective means by which human societies resolve conflicts over the use of scarce resources and maintain social stability. Institutions evolve as human knowledge improves or as the situation changes. To find suitable principles to guide institutional evolution, we reviewed examples of historical institutional evolution in China to seek guidance for the evolution of other modern institutions. We found that gradualism, win–win paths, stability, neutrality, and cultural diversity are key principles for successful institutional evolution. However, fear of the uncertainty associated with institutional change and changing external conditions will affect the results of institutional change. Designers of new or revised institutions should use publicity and education, combined with gradualism (pilot tests), and measures to ensure neutrality and political stability, to increase acceptance of institutional evolution. In both politics and economics, institutional change can be a long evolutionary process, and it’s necessary to balance the changes in political institutions with economic development throughout the process.